Ok, this just got a little stranger. After fiddling around, I was able to get the Receiver to play the audio and display the image from the DVD player. Everything was perfect. Strangely, the change I made was to tell the receiver that the VDP input was from HDMI1 and it worked.
Here is where it got weird. It worked as long as I didn't touch anything. As soon as I switched to a different device (such as TV or PS2) it would not recognize the DVD when I switched back.
If I change different devices to HDMI, the DVD player will occassionally be recognized by the receiver. However, this only lasts as long as I don't change devices. If I switch and come back, it is gone again.
Has anyone ever heard of this or does it sound like I have a defective receiver?